This invention relates to processes for electronic trading systems. More particularly, this invention relates to systems and methods for electronic trading that permit principal/broker trading.
With the expansion of the use and capabilities of computer infrastructure there has been a corresponding progression of buyer/seller transactions away from classical “open outcry auctions” toward electronic trading systems. Computer-based electronic trading systems have been used in a variety of markets including, for example, stocks, bonds, currency, commodities and futures markets. The use of electronic trading systems offers many advantages over conventional methods for trading including increased speed of price dissemination and trade execution, reduced transaction costs, potential for trading across multiple markets simultaneously, reduced probability of erroneous trades, enhanced compliance with credit limits, reduction of risk exposure, and the potential to provide controlled anonymous trading.
In an electronic trading system, a trader desiring to make a trade may directly access a trading system, typically using a trading system workstation, personal computer, dumb terminal connected to a network, or any other suitable device, and submit trading commands to participate in an electronic transaction. For example, a first trader may submit a bid to buy a certain quantity (or size) of a given item at a specified price using a workstation that is part of the electronic trading system. In response to this bid, a second trader may sell a certain quantity and “hit” the bid by pressing a suitable button or entering a command on another workstation connected to the trading system. If the second trader meets certain requirements, the second trader then causes a trade to be executed upon hitting the first trader's bid.
Despite the advantages afforded by electronic trading systems, some traders cannot or do not wish to operate electronic trading system workstations. They may lack the computer equipment or competency required to operate a workstation, or may simply not wish to perform the related duties. Instead these traders may act as a principal trader and call a broker trader of an electronic trading system and verbally relay their requested transaction. Alternatively, a principal trader may use instant messaging or electronic mail (e-mail) communications to convey information to a broker trader regarding a requested transaction. All of these types of communications require that a broker trader receiving the communications submit corresponding trading commands into an electronic trading system. Thus, there may exist principal traders, who direct the trading actions of broker traders, and broker traders who actually utilize the electronic trading system to engage in trading.
Thus, it is an object of the invention to provide systems and methods for electronic trading that permit principal/broker trading.